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What Is Top Up FD? How To Add & Grow Money in FD

Wish

Written by Kritika Singh

Updated Jul 19, 2024

Fixed deposits are considered the safest investment option for investors because they give a secure and steady return. Fixed deposits are a type of investment plans in which individuals invest a lump sum amount for a specified period and get interest on that amount in return. Now FD has special features in which an individual can add more to their investment.

About Top Up FD

Top Up in FD is the additional deposit facilities offered by the bank and financial institution to the existing customers of FD holders. It allows investors to add extra funds to their existing FD account, thereby it helps in increasing their savings and potentially earning higher interest on the added amount.

What Are Some of The Features of Top Up FD?

How to Add & Grow Money In FD: Explained

Assume that a person has a fixed deposit in any bank for the amount of 2,00,000 on an interest rate of 7% annually for a tenure of 2 years. Let’s now look at the impact of the same with a top up FD below:

 

Assume that a customer has an investment of 2,00,000

Case 1

Suppose that a customer opts for a top up of 10,000 at the end of 2 years

Case 2

Suppose that a customer opts for a top up of 30,000

Case 3

Suppose that a customer does not opt for a top up 

Investment Amount

2,00,000

2,38,000

2,58,000

2,28,000

Tenure

2 years

2 years

2 years 

2 years

Rate of Investment

7%

7%

7%

7%

Interest Earned 

28,000

33,320

36,120

31,920

Maturity Amount

2,28,000

2,71,320

2,94,120

2,59,920

  • Suppose that a customer has an FD of 2,00,000 for the tenure of 2 years on an interest rate of 7% annually.
  • Customers have the option to renew the FD and another option is to do Top Up by adding extra funds in his/her FD.
  • To clear the doubt on Top Up features we have created three cases in which the first two cases of Top Up features have been explained which the first case has a smaller amount and the second case has a bigger amount.
  • The last case, which is case 3, is made to explain what will happen when there will be no Top Up feature added to the investment.
  • From the above case which is created, we came to know that if the Top up is done in the FD then in case 1 the maturity amount will be 2,71,320 and in case 2 the amount will be 2,94,120.

Benefits of Top Up FD

Flexibility - There is no limit to the amount that is to be added in FD as a Top Up so an individual can choose the amount as per their need and ability.

Higher Return - One can choose Top Up features in FD during the time of renewal with the new rate of interest to earn a high return on investment.

Easy to Opts - In this growing technology adding Top Up has become easy by doing some steps on the internet banking by visiting bank websites.

Is Top Up FD Good Or Not?

Yes, Top Up FD is definitely a good option for individuals who have a surplus amount of money and want to increase their investment, so they can add that money to their existing FD account and earn extra interest on those investments. It is considered as a safe investment because of its secure and steady return on investment.

FAQs

Ques1. What is the period in which the Top Up feature can be availed?

Ans. An individual can avail Top Up feature within 30 days before the maturity date of investment.

Ques 2. Is there any limit to adding money to the Top Up feature of FD?

Ans. No, there is no limit in adding money to the Top Up feature of FD.

Ques 3. How to add money to the FD under the Top Up feature?

Ans.  One can visit the bank and do the procedure stated by the bank employee and on the other hand with the help of Internet banking it can be done.

Wish

Written by Kritika Singh

Kritika Singh is a marketing professional with over 10 years of work experience in the field of insurtech, health, FMCG, renewables, and public policy. KrRead More

Disclaimer

This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.